Qatar has links to its friends cut in a tiff

Iran ties gall Sunni neigh­bours

The Star Early Edition - - BUSINESS REPORT / INTERNATIONAL - Glen Carey and Zaid Sabah

SAUDI Ara­bia and three other Arab coun­tries cut off most diplo­matic and eco­nomic ties to Qatar, in an un­prece­dented move de­signed to pun­ish one of the re­gion’s fi­nan­cial su­per­pow­ers for its ties with Iran and Is­lamist groups in the re­gion.

Oil gained and Qatari stocks plunged after Saudi Ara­bia, Bahrain, the United Arab Emi­rates (UAE) and Egypt said they will sus­pend air and sea travel to and from the Gulf emi­rate. Saudi Ara­bia will also shut land cross­ings with its neigh­bour, po­ten­tially de­priv­ing the emi­rate of im­ports through its only land bor­der.

Qatar called the ac­cu­sa­tions “base­less” and said they were part of a plan to “im­pose guardian­ship on the state, which in it­self is a vi­o­la­tion of sovereignty.”

Qatar is one of the world’s rich­est coun­tries and of strate­gic im­por­tance, be­ing the big­gest pro­ducer of liq­ue­fied nat­u­ral gas. A coun­try with a pop­u­la­tion smaller than Hous­ton, its $335 bil­lion (R4.28 tril­lion) sovereign wealth fund holds stakes in com­pa­nies from Bar­clays and Credit Suisse Group. It also hosts the for­ward head­quar­ters of Cent­com, the US mil­i­tary’s cen­tral com­mand in the Mid­dle East.

Em­bold­ened by warmer US ties un­der Pres­i­dent Don­ald Trump, the Saudi-led al­liance is seek­ing to stamp out any op­po­si­tion to form­ing a united front against Shi­ite-ruled Iran. And while yes­ter­day’s es­ca­la­tion is un­likely to hurt en­ergy ex­ports from the Gulf, it threat­ens to have far-reach­ing ef­fects on Qatar.

“There are go­ing to be im­pli­ca­tions for peo­ple, for trav­ellers, for busi­ness peo­ple. More than that, it brings the geopo­lit­i­cal risks into per­spec­tive,” No­mura As­set Man­age­ment Mid­dle East chief ex­ec­u­tive Tarek Fad­lal­lah said.

Brent crude rose as much as 1.6 per­cent to $50.74 a bar­rel on the Lon­don-based ICE Fu­tures Europe ex­change, be­fore par­ing gains to 0.4 per­cent at 8.34am in Lon­don.

Height­ened ten­sions be­tween Saudi Ara­bia, the world’s big­gest crude ex­porter, and Iran typ­i­cally draw mar­ket at­ten­tion to the Strait of Hor­muz, through which the US Depart­ment of En­ergy es­ti­mates about 30 per­cent of the seaborne oil trade passes.

US al­lies

Qatar’s QE In­dex for stocks tum­bled 8 per­cent, the most since 2009 at 10.13am in Doha. Dubai’s bench­mark in­dex fell 1.2 per­cent.

The five coun­tries in­volved in the dis­pute are US al­lies, and Qatar has com­mit­ted $35bn to in­vest in US as­sets. The Qatar In­vest­ment Author­ity, the coun­try’s sovereign wealth fund, plans to open an of­fice in the Sil­i­con Valley.

US Sec­re­tary of State Rex Tiller­son said it was im­por­tant that the Gulf states re­main uni­fied and en­cour­aged the var­i­ous par­ties to ad­dress their dif­fer­ences. Speak­ing at a news con­fer­ence in Syd­ney, Tiller­son said the cri­sis would not un­der­mine the fight on ter­ror­ism.

“What we’re see­ing is a grow­ing list of some ir­ri­tants in the re­gion that have been there for some time,” Tiller­son said. “Ob­vi­ously they’ve now bub­bled up to a level that coun­tries de­cided they needed to take ac­tion in an ef­fort to have those dif­fer­ences ad­dressed.”

Yes­ter­day’s ac­tion is an es­ca­la­tion of a cri­sis that started shortly after Trump’s last month trip to Saudi Ara­bia, where he and King Sal­man sin­gled out Iran as the world’s main spon­sor of ter­ror­ism.

Three days after Trump left Riyadh, the state-run Qatar News Agency car­ried com­ments by Qatari ruler Sheikh Tamim bin Ha­mad Al Thani crit­i­cis­ing mount­ing anti-Iran sen­ti­ment. Of­fi­cials quickly deleted the com­ments, blamed them on hack­ers and ap­pealed for calm.

Saudi and UAE me­dia out­lets then launched ver­bal as­saults against Qatar, which in­ten­si­fied after Sheikh Tamim’s phone call with Ira­nian Pres­i­dent Has­san Rouhani over the week­end in ap­par­ent de­fi­ance of Saudi crit­i­cism.

“Qatar is right in the mid­dle of the Gulf Co-op­er­a­tion Coun­cil (GCC) coun­tries and it has tried to pur­sue an in­de­pen­dent for­eign pol­icy,” said Peter Slu­glett, direc­tor of the Mid­dle East In­sti­tute of the Na­tional Univer­sity of Sin­ga­pore. “The idea is to bring Qatar to heel.”

Past Cri­sis

Dis­agree­ments among the six GCC mem­bers have flared in the past, and ten­sions with Qatar could be traced to the mid-1990s when Al Jazeera tele­vi­sion was launched from Doha, pro­vid­ing a plat­form for Arab dis­si­dents to crit­i­cise au­to­cratic gov­ern­ments in the re­gion ex­cept Qatar’s.

It also played a key role in sup­port­ing anti-regime move­ments dur­ing the Arab Spring, act­ing against Saudi and UAE in­ter­ests by bankrolling the Mus­lim Brother­hood’s gov­ern­ment in Egypt. Qatar also hosts mem­bers of Ha­mas’s ex­iled lead­er­ship and main­tains ties with Iran.

In 2014, Saudi Ara­bia, the UAE and Bahrain tem­po­rar­ily with­drew their am­bas­sadors from Qatar. That dis­pute cen­tred on Egypt fol­low­ing the army-led ouster of Is­lamist Pres­i­dent Mo­hamed Mursi.

This time, Saudi Ara­bia cited Qatar’s sup­port of “ter­ror­ist groups aim­ing to desta­bilise the re­gion,” including the Mus­lim Brother­hood, Is­lamic State and al-Qaeda. It ac­cused Qatar of sup­port­ing “Ira­nian-backed ter­ror­ist groups” op­er­at­ing in the king­dom’s east­ern prov­ince as well as Bahrain.

Saudi Ara­bia, Bahrain and the UAE, gave Qatari diplo­mats 48 hours to leave. – Bloomberg


Saudi King Sal­man bin Ab­du­laziz Al Saud, left, talks to Sheikh Mo­hammed bin Zayed Al Nahyan, Abu Dhabi’s Crown Prince in Jed­dah, Saudi Ara­bia. Four Arab na­tions cut diplo­matic ties to Qatar early yes­ter­day, deep­en­ing a rift among Gulf Arab na­tions.

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